“We have to do something about this!” Randy exclaimed. The board had just officially received the past year’s financial statements and the picture was bleak. “Isn’t this like when baseball teams are always losing, and they fire the coach? We should fire the CEO, shouldn’t we?”
Silent, uncomfortable glares darted across the table. The fact that the CEO was sitting right there certainly increased the awkwardness.
Cyndi calmly said, “Maybe we should all take a deep breath and think back to what has happened over the last year or so...” She reminded the board that their monthly reports had shown a clear trend toward this year-end. And that the disappointing pattern had been discussed several times at the board meetings.
“But if we don’t take some strong action, it will look like we are just letting this happen,” retorted Randy with nods from others around the table.
“So let’s keep thinking and talking,” Cyndi reasoned, “so we better understand our situation and what this experience teaches us. We’d be deceiving ourselves if we think we’re not as culpable as the CEO. Unless you think we should fire each other, this organization’s stakeholders will be best served if we figure out the problem and the answers rather than act surprised and point fingers.”
The board, along with the CEO, buckled down and processed their predicament.
How to Not Just Do Something (and then regret it):
Ensure you have a system that regularly reports results so the board doesn’t get blindsided with bad news.
Resist the temptation to jump to conclusions and actions when results are disappointing.
Take time to thoughtfully reflect on the results by responding to questions like:
What assumptions did we make at the beginning of the planning period that have proven to be erroneous? In what ways should our assumptions change?
How do our results compare to similar organizations in the past year? If notably different, why?
How could the board’s leadership improve in the planning and interim observation phases?
What do we wish management had done differently? What inhibited management from taking those actions?
Record what comes out of the discussion to capture the insights for future application.